Xaman & AMM

All about Xaman and the AMM amendment

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On March 22, 2024, the AMM amendment was implemented on the XRP Ledger mainnet.

On the same day, Xaman v2.8 was released to support it.

This article answers some frequently asked questions about AMM.

What is AMM?

Put simply, Automated Market Makers (AMMs) work by pooling two tokens together to form a liquidity pool. Each AMM holds a pool of two assets which enables users to swap between them at an exchange rate set by a formula.

For more information, here are a couple of good resources:

What role does Xaman play in AMMs?

Beginning with version 2.8, Xaman fully supports AMM transaction signing on the XRP Ledger.

That sounds just like the way you support other XRPL amendments such as NFTs.

Exactly. When the NFT amendment was implemented on the XRPL, Xaman (formerly Xumm) supported transaction signing for NFT transactions.

Shortly after implementation, several NFT platforms appeared in the community providing NFT marketplaces, NFT minting, exchanges, sales, marketing, technical support, etc. These NFT platforms specialized in NFTs and many of them worked with us to create various xApps in Xaman.

In the case of the AMM amendment, there are already several companies who have created AMM user interfaces. Those interfaces will allow you to interact with the various liquidity pools on the XRPL. while we continue to focus on our area of expertise.... namely keeping your account secrets safe and secure.

Are there any AMM user interfaces that you recommend?

AMM is still very new and while there are a few companies offering AMM user interfaces, we are going to wait and see how they manage their pools (and their users) before we offer any recommendations.

In the meantime, here's a list of companies that offer AMM interfaces:

Can I use another AMM interface?

You are free to use whichever AMM interface you like, but please be vigilant when deciding. There are bound to be scam sites out there so make sure you do your research before choosing.

How do I provide liquidity to an AMM pool?

Once you have selected an AMM interface, you should work with them to learn how to it. They will have instructions on how to participate in the various liquidity pools. Try reaching out to their customer service team for specific instructions on how to do that.

How much passive income can I expect to receive by participating in an AMM pool?

Liquidity pools are not a guaranteed path to consistent income and should not be viewed as a 'get rich quick" investment. AMM's are complicated and often volatile investment instruments that can sometimes lead to passive income but other times, can lead to a complete loss of invested assets.

We strongly recommend that you seek financial advice before investing in an AMM liquidity pool. Any AMM provider that guarantees consistent passive income should be avoided.

How do I report AMM earnings/losses on my taxes?

Each country will have their own rules when calculating gains/losses related to funds invested in AMMs. It is up to you to contact a tax professional in your country to determine the necessary reporting requirements.

Is there a step by step guide to getting started with AMM on the XRPL?

No, not really.

The first thing to do is to install the latest version of Xaman. Doing this will give you the ability to sign AMM transaction types on the XRPL.

Next you should do some research and investigate some of the AMM user interfaces in the community. This list above is a good starting place.

Once you have decided on one, they should have a "Getting started" guide explaining how to use their services.

I created my own token. How do I get my token added to an AMM pool?

You can find instructions on how create an AMM for a given asset pair:

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